Kensington Swan's view on aspects of the construction industry

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Does a builder have an overall duty to ensure building materials are fit for purpose?

The Capital & Coast District Health Board (‘CCDHB’) contracted Fletcher Construction to build the majority of its $346 million Wellington Regional Hospital. Construction was substantially completed in December 2008.

In May this year, the health board lodged a claim against Fletcher in the High Court, alleging that there are defects in the copper pipes used in the hot and cold water system (which now have pinhole leaks) and in the system’s design (requiring its replacement). The health board alleges that Fletcher owed a duty to ensure the pipes were fit for purpose.

Fletcher has applied for a summary judgment dismissing CCDHB’s claim. It argues that the piping system was designed by Beca, who contracted directly with CCDHB. And in terms of the plumbing work, Fletcher contents that the installation of the systems was subcontracted to a specialist (now liquidated). It argues therefore, it had no duty to ensure that the building materials were fit for purpose. Further, Fletcher contends that such a duty cannot be owed, as it would require every contractor to audit the quality of building materials supplied. The health board argues that Fletcher could not delegate its duty to the subcontractor.

The hearing for the summary judgment application occurred yesterday, and the outcome of the court’s decision is one to watch.